How a First Time House Flip Went Bad
Let’s call him John. A bright and hard worker just trading time for dollars at his regular job. His first house flipping experience could have been a lot better. John was watching “Property Ladder” on the A&E network one day and got the bright idea to flip a house himself. After all, those people were making money. A complimentary show “Flip This House” confirmed that money could be made, lots of money. If you haven’t seen Property Ladder, it’s a television show that features first time home flippers. Usually in that show the inexperienced flipper, egged on by Kirsten Kemp, make almost a year’s salary or more by fixing up an old house and selling it. Kirsten Kemp is a veteran of flipping houses and is a bit too pretty to be mistaken for Bob Vila. John figures that the people featured in these shows are not all that bright and certainly he could do as well. With a bit of nervousness John put a 10% down payment on a home that needed repairs and begin the repair process. Or did he? The first thing John did was to ponder what really needed to be fixed and if he needed a contractor to do it. Two weeks went by. After getting several bids, John chose a contractor to come in and totally renovate the property for $11,000. That included paint, carpet, appliances, and a new wall to turn an open area into another bedroom. Once it was agreed, the contactor was to start working. As luck would have it, the contractor had some unfinished jobs and couldn’t start for another two weeks. John was patient, after all it was going to be a great flip and he was going to make money. It was just another $800 for an extra month, no big deal. Once the contractor started he stared with a bang. Just like on the show “Flip this House” a big yellow dumpster was deposited on the lawn and a crew started ripping out wall paper and junk from the house. That demolition lasted about two days. The next thing this “go getter” contractor did was to disappear for another two weeks. The excuse: Men had quit and another job was pushing them behind. To make a long story short, the contract took 8 months to get nearly complete, and then John pulled the plug and fired the contractor. John paid others to come in a finish what was started. He had now 9 months of house payments into the project, 10% down, and construction costs. After the house was ready, John listed it with an agent, and it sat another month. John lowered the price a bit with the prompting of the agent, but got cold feet after two weeks and wanted to raise it again. Too late! The house had a full price offer. Good news, sort of. All said and done John made a little money and got a whole lot of experience. It was a flop, but at least he didn’t lose money. Let’s review what John, now wiser, could have done differently on his first flip. Firstly, putting 10% is ok, but not ideal. John should have used private money or have financed the property at 100%. That money could have been used for fix up rather than being tied up in the property. Second. John waited too long to decide what he was going to do. He should have known before he bought the property what his plan was. This would have saved two weeks at least. Third. While John got a referral for the contractor, he should have gotten more bids. A deadline for the completion of the job, with penalties, should have been written in the contract. Fourth. John waited too long to fire the contractor once he knew there was a problem. He was afraid that he would still owe the full amount if he terminated the contractor before the work was done. A proper contract would have prevented that fear. Sixth. John listed with a realtor too early. The property should have been for sale by owner from day one and John should have tried to market the property himself. Seventh. The price was set, and then changed too quickly. Better marketing would have netted John with a nicer profit. John should have known the selling price even before buying the property. A lot of mistakes were made, but John still made a slim profit. All is well that ends well, but you don’t need to make these same mistakes. Learn from John. Scott Ames is publisher of BirdDogCity.com a website dedicated to those interested in flipping houses for profit, either retail or wholesale. You may visit the site at http://www.birddogcity.com |
Other Trading Tips Articles
Vertical Spreads - Time Decay and Volatility Trading Opportunities When vertical spreads are mentioned, they quite often come with monickers such as “bull” and “bear”. This lends most to think of vertical spreads as directional plays which is true. However, vertical spreads can be used to take advantage of two other potential trading opportunities – time decay and volatility movement. ...Just Say 'NO' to Your Stock Broker We have all heard that slogan that started back when Nancy Reagan was in Washington. It was all about drugs. Now I want to remind you this can be your slogan when you get one of those telephone solicitations from a strange broker or even your own stockbroker who is acting a little strange. By that I mean he wants you to buy something.Cur ...Forex Trading – Five Tips to Make Money Fast! This article is all about FOREX trading to make you rich - and we’re going to give some alternatives to conventional investment wisdom. Why? - Because most traders in FOREX follow the norm and make average gains - while this article is about making spectacular gains from FOREX Trading and making money fast!The AimHere we are going ...Take Home The Money For short term trading, not much beats momentum, where a stock is on fire and we simply hop on for a short ride and jump back off. This is the life blood of short term holds whether it be a pre-earnings run, a split run, or a news driven pure momentum play. One of the biggest faults that can be made in this game is hanging on too long.One ...Trying Forex Trading with the Best Strategy and Approach With the day things are today, more people are getting interested in investing their money to make them grow faster. The problem is, not too many people are willing to take the risk of investing it because of the risks, so some of them just let their money rut in banks. Not that there’s anything wrong with banks, it’s just that they have low rat ...10 Ways to Make Money With Arbitrage Trading Working at home is a very hard business that many people think is very easily done. It is a well-known fact that 99% of the people who try to start working from home fail. They lack information about working at home, and they usually buy into a program that only offers one way for you to make money. Most of the time in order for you to ma ...9 Survival Tips for the Market Shakeout Blues Investors who bought during the top of the frothy commodities rally are now panicking or kicking themselves. Neither activity helps an investor or trader think straight. Below are a few tips for dealing with the current market shakeout.1. If you believe you invested in the right stock(s), then turn off your computer and do something enjoy ...Handicapping the Pacers Trade of Ron Artest - Part 1 The Jerome Bettis “Super Bowl in his last year” press is a great story. But what if Ben Roethlisburger jumped into the stands and ruined everything? That is what the Pacers have had to go through the past year and a half. Indiana’s serious title shots have been obliterated since the Mallace in the Palace incident. How could a team that beat near ...Bollinger Bands – How to Use Them to Make Massive Profits Bollinger bands will help you to predict big trending moves, act on big trend reversals and finally, time trading positions with greater accuracy for bigger profits.Here we have related Bollinger bands to the currency markets (as it is here that they are most useful) - but they are useful in all financial markets.What are Bollinger ...Simple Techniques For Mastering The Best Trading Systems That Turns Big Profits Once you`ve developed the best trading systems that accurately reflects your goals, and can respond to any market situation with clear actions, you are ready to take the next step in your trading. These are some principals and techniques that I have found to be indispensable in my trading career. Once you`ve begun using them, I`m sure you`ll fee ...Choosing A Forex Trading System – Part 3 OK, in our last installment I showed you how a sample of a Forex trading system with a high percentage of winning trades could still be a losing system overall.The whole point of the exercise was to get you to take a closer look at the performance results of trading systems that you are interested in pursuing. Now that you know that it i ...7 Small Business Marketing Tips Here are 7 low-cost but highly effective marketing tips to help any small business find customers and generate sales quickly.1. Don't Advertise Like a Big BusinessBig businesses advertise to create name recognition and future sales. A small business can't afford to do that. Instead, design your advertising to produce sales . ...The Frugal Way to be Stylish It is easy to think that it takes a lot of money to have style. But the fact is that it doesn't take much at all. It just takes some wise choices and a few tricks of the frugal lifestyle.When it comes to fashion, the world seems to think that high-end labels are the only way to go. However, there are many very stylish people out there tha ...Financing Structure Tips Let us first examine the various parties involved in a financing transaction. On one side of the playing field there is the private company in the process of raising capital. On the other side there are the investors. Investors may include, family and friends, Angel Investors, Private Equity Firms (also known as Venture Capital Firms) and Hedge ...Top 7 New Ways to Promote Your Business Is your marketing less than you wish it to be? Is your marketing simply not pulling in the clientele you wish it would? Is your marketing not living up to your business or marketing plan? Is your marketing proper as per the MBA textbooks, but it is simply not working to your expectations? Do you feel these expectations are reasonable and achieva ...My 7 Most Important Business Lessons Millions of people start new small businesses in the United States every day. Many fail at running a small business every day. What causes one business owner to succeed where another fails? There are seven key areas to focus your efforts for a successful small business. It starts with knowing oneself and ends with not being afraid to ask for hel ...Credit Card Fraud Prevention - Advice for Online Merchants Finding a fraudulent transaction on a credit card statement can be an extremely distressing experience for a card holder. However, credit card fraud has two victims – the person whose card details have been stolen and the merchant whom the fraudulent transaction was made with. When people think of this crime the second of these is often overlook ...Top Ten Tips For Mending Your Relationship 1. Take responsibility for your own actions. There is nothing more guaranteed to prolong conflict than excuses of the type: “If you hadn’t done X, then I wouldn’t have done Y.” If you own your own stuff, then you leave your partner free to do the same.2. Apologise at the first possible opportunity. The “S” word, sincere ...Stock Options A stock option is defined as a right to buy or sell a stock at a stated price within a specified time. Buyers of stock options are called holders and those who sell options are writers. "Call" suggests an option contract giving the owner the right but not the obligation to buy a specified amount of an underlying security at a specified price wit ...Poker Winnings - How to Play for Millions in Profits Quickly If you are a good poker player, you already have the skills to play a different game - one that offers far bigger rewards for the skills you have.So, what is the game? - Trading financial markets such as currencies, which is an area that many poker players excel in - many of the world’s greatest traders are poker players too!My fir ...Room by Room Makeovers: Kitchens for Cooking and Entertaining Kitchens today are the family rooms of yesterday. Many have keeping rooms with fireplaces, and cozy nooks for reading, television viewing, and sharing a cup of coffee. Make the most of the heart of your home with some of the tips and suggestions here.Brighten the backsplash! Tile is the most often selected material for durability and main ...High Return Investments – Why the Majority of Traders Don't Win! Lets face it, we all want high return investments but the majority of investors achieve mediocre returns and this is they don’t understand two important facts.If they did, they could be on their way to far higher returns And a true high yield investment.Let’s look at the above in more detail and two keys to making huge returns from ...Oil Stocks As A Long Term Investment The demand for world oil is increasing while world reserves are decreasing. This is a known fact. The current price of oil can certainly confirm this statement. Consensus also agrees that we will never see $25.00 oil again. The logical conclusion to our above statement is oil stocks should be a good long term investment. However, the location of ...The IBEX 35 Index From Raw Data to Useful Information Most countries have a stock-exchange where you can trade the stocks of the various companies. If you are starting the investment game, the stock market just looks like a raw list of data (The list below represents the IBEX 35 which is the stock index of the Stock-Exchange of Madrid (source: www.bolsamadrid.es/esp/mercados/acciones):ABERTI ...Home Teeth Whitening Tips About a decade ago, people knew only one way of getting their teeth whitened- that was through dental in-office whitening. It was a wearisome procedure but slowly when people started showing a compulsive concern of having a whiter set of teeth, the impulsion goaded a number of different bleaching formulas and teeth whitening kits started floodin ...Online Commodity Brokers Recent technological advances have enabled investors to execute trade and place their orders through computers using the Internet. This has revolutionized the way shares and securities are traded. To make use of the current trend, organizations have extended the range of financial services provided. Online commodity brokers are involved in trans ...Seecrets on Investment: Tired of Making Huge Losses in the Stock Market - Part 2 Fundamental analysis.Fundamentals analysis says the best way to predict the future trends of a stock is to understand the financial figures of the underlying company. The fundamental analyst would calculate a theoretical value of the company using cash flow analysis, recent dividends and earnings, future dividends and earnings projections ...Learn to Invest Money: Three Tips for Finding a Superior Financial Consultant Have you ever been frustrated by the seemingly endless supply of cookie cutter financial consultants that work for the biggest investment firms on Wall Street? Ever wonder how to really know if Jane, who was assigned to be your new financial consultant, is any better than Peter, your ex-financial consultant that just left your firm? I’ll give yo ...Learn to Invest Money: Investing Made Fun For Teenagers (Part Two) Do you hate your after school job and wish there were easier ways to make money? In this article, I’ll tell you how. In Part I of this article, you learned five rules to help you win at investing and dating. In Part II, I’m going to tell you the last five rules.To start, let’s review the definition of a stock again.Stock – A way t ...Day Trading Tips Worth Reading Are you tired of the same old day trading tips? Like, “cut your losses and let your profits run.” “Never let a gain turn into a loss.”, or the most repeated tip, “Buy low, sell high.”So how about something new? Let me give you some specific day trading tips that will turn your trading around.A good defense beats a ...Ten Tips for Cross Cultural Communication Here are some simple tips to help you improve your cross cultural communication skills:Slow DownEven when English is the common language in a cross cultural situation, this does not mean you should speak at normal speed. Slow down, speak clearly and ensure your pronunciation is intelligible. Separate ...
|
